Top Countries to Start an Online Business in 2021

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Many online businesses are expected to launch in 2021. Which country is the best place to do this?

E-commerce continues to grow year after year. EMarketer predicts global e-sales will reach $ 6.542 trillion by 2023, accounting for 22% of all retail sales (up from 14.1% in 2019). This means that many will launch their online business in 2021.

But where is the best place to do this?

Best Accounting Software specialists studied 20 different categories in 99 countries. From GNI per capita and corporate tax rates to the number of internet and social media users and the availability of coworking spaces in every country. According to the data obtained in the course of the study, most of the countries most suitable for starting an online business are located in Europe. Together with the US, Canada, and Singapore, these countries provide an excellent starting point for business, but the “perks” of these places tend to be accompanied by a higher corporate tax rate.

Since no country comes out on top in all categories, you can determine which country is best suited for the needs and ideas of your particular business.

Criteria for evaluation​

1. Internet coverage and penetration​

• Mobile internet speed - the average mobile internet speed in the country (Mbps).
• Broadband internet speed - The average broadband internet speed in the country (Mbps).
• Fixed broadband subscribers - the number of fixed subscribers per 100 people.
• Internet users -% of the population using the Internet.
• Social media users -% of the population using social media.
• Secure Internet Servers - Number of secure Internet servers per 1 million people.
• Online shopping / online bill payment -% of the population using the Internet to make purchases and / or pay bills.

2. The wealth of the country and the simplicity of the processes​

• Corporate tax rate.
• GNI (Gross National Income) per capita - measured in US dollars.
• Individuals with a financial account -% of the population (15+) with an account with a financial institution / mobile money service provider.
• Payment Providers - Availability of services like 2checkout, Stripe, PayPal, Adyen, Braintree, WorldPay, and Shopify in the country.
• Economic Freedom - focuses on 12 factors in four categories: rule of law, size of government, regulatory effectiveness, and open markets.
• Number of procedures to start a business - The number of procedures required to start a business, including obtaining permits and licenses, and completing records, checks and notices.
• Days required to start a business - the number of days required to complete the procedures for running a business legally.
• The cost of starting a business is the cost of registering a business as a percentage of gross national income (GNI) per capita.
• Time Zones - The number of countries with the same time zone (based on capitals).

3. Access to delivery services and skilled workforce​

• The Logistics Performance Index (LPI) - measures six areas of a country's logistics, including the efficiency of the customs clearance process, the quality of the trade and transport infrastructure, the ease of organizing deliveries at competitive prices, the competence and quality of logistics services, the ability to track consignments, and the timeliness of shipments.
• Integrated Postage Development Index - Covers the four main factors of a postal operator: how reliable it is, coverage, relevance or intensity of demand, and the ability to innovate.
• Coworking Spaces - Access to work / office space.
• Digital Skills - The level of digital skills in a country.

Each category was rated at 100 points (100 for the leader, 0 is the worst indicator), and the average score obtained for all 20 categories was also calculated.

Top 10 countries to start an online business​

1. Denmark​

Denmark tops the list, which has the highest rating in terms of secure Internet servers (over 277,000 per 1 million people) and in terms of the share of individuals with a financial account (99.92%). And in terms of the cost of starting a business, Denmark is the cheapest of our ten (0.2% of GNI). The country also ranks second in terms of the number of people using the Internet for shopping / paying bills (88%) and ranks first in terms of the total number of Internet users (98%).

However, Denmark has the second-worst email efficiency of any country on the list, very low collaboration spaces (32) and an average mobile internet speed score (66.68 Mbps), low social media users (71%) and high corporate tax rates (22%).

2. Switzerland​

Switzerland could be the right country to start an online business. This is due to the highest GNI per capita score ($ 85,500), excellent postal performance, access to 6 of 7 payment processing providers, and connectivity to 44 other countries in the same time zone (UTC + 1). Switzerland also has the largest population with broadband internet access (45.21%).

However, Switzerland, like all 10 countries on the list, ended up in the middle of the table in terms of corporate tax rates (21.15%), social media penetration (52%) and mobile internet speed (73.85 Mbps). It also scored below average for the number of secure Internet servers (just under 96,000 per million people) and lacks coworking space, but that's to be expected given the size of the country.

3. Netherlands​

The Netherlands is the best of the top ten for mobile internet speeds (88.13 Mbps), but is still in the middle of the table overall. The country ranked second in postage efficiency, fifth in fixed broadband subscribers (43.63 per 100 people) and is one of the fastest places to start a business in just 4 days. However, despite the speed at which you can start a business there, the Netherlands have high start-up costs - 4% of GNI.

4. United States​

With 2,421 coworking spaces available to employees, the United States is the leader in this category. That's 42.98% more seats than India, which is in second place. The US also has some of the best scores in terms of coverage of payment providers (all seven operate here), broadband speed, social media penetration, internet server security, and corporate tax rate.

However, the United States has a low rating for mobile internet speed (53.44 Mbps), the proportion of people with financial accounts (93%) and the proportion of Internet users (87%). If you're thinking about global trade, keep in mind that the US shares its time zone with 12 other countries.

5. Norway​

89% of the country's population uses the Internet to shop and pay bills, which is why Norway is the leader in this category. The country also ranked second in terms of GNI per capita (82,500) and, together with Denmark, ranked first in terms of the share of Internet users among the total population (98%).

Of the top ten, Norway has the lowest indicator of economic freedom, which is primarily due to high government spending and an average level of freedom of work and tax burden. The country also lacks secure internet servers and collaboration spaces (however, this can be attributed to its small size and small population).

6. Sweden​

Sweden ranked best of the top ten countries in digital skills and second in logistics. Sweden also leads the way in terms of the proportion of the population using the Internet (96%), having a financial account (99.7%) and using the Internet for purchases / payments (84%). However, like many of the top ten countries, Sweden lacks secure internet servers and collaboration spaces.

7. Singapore​

For exceptionally fast broadband speeds, head to Singapore as it averages 229.42 Mbps (the only country in the study to have more than 200 Mbps). Singapore also ranks first in economic freedom (89.4), first in social media penetration among users (79%) and has the lowest corporate tax rate (17%) among the top ten countries.

Starting a business here can be quite quick and simple: only two procedures are required, which take about two days. However, what lowers Singapore's ranking is its lack of broadband subscriptions (25.81 per 100 people) and the percentage of the population using the Internet for purchases / payments (57%). In addition, only six countries are in the same time zone as Singapore.

8. Germany​

In the first place in the ranking of logistics efficiency is Germany, which also came out on top in terms of the efficiency of postal services. However, the country was the worst in terms of mobile speed (49.67 Mbps) and broadband speed (120.13 Mbps). In addition, only 45% of the population use social networks. Germany is also the most expensive and difficult place to start a business out of our top ten - starting with up to 6.5% GNI spending and nine procedures. It also has the highest corporate tax rate (29.89%).

9. Canada​

The hallmarks of Canada are the ease of starting a business (two days and two procedures) and low costs (0.3% of GNI). In many other areas, the country is on a par with other countries in the ranking, second only in terms of GNI per capita ($ 46,370) and having a high corporate tax rate (26.8%).

10. Luxembourg​

With the third highest GNI per capita ($ 73,910) and excellent performance in several other regions, Luxembourg is in the top ten. However, compared to other countries, the country lags behind in terms of mail efficiency, availability of collaboration spaces (16), logistics efficiency, and the number of days it takes to start a business (17).

10 worst countries to start an online business​

We got acquainted with the best countries for starting an online business. Which countries, on the contrary, should be avoided?

1. Haiti​

There is little that would appeal to an online business owner in Haiti with below average grades in most categories. The country has the lowest rate of secure Internet servers (only 5 per million people) and the development of postal services. Haiti is ranked second in terms of GNI per capita at the bottom of the rankings ($ 790). Despite the fact that the number of days (97) and procedures (12) required to start a business are in the middle of the table, the cost of starting a company at 179.7% of GNI can scare off many.

2. Venezuela​

Venezuela lags behind in terms of mobile Internet speed (8.8 Mbps), economic freedom, the number of procedures (20) and days (230) required to start a business, as well as the costs of this (211.8% of GNI). However, there are quite good indicators for the penetration of financial accounts (73.49% of the population) and Internet users (72% of the population).

3. Uganda​

The country has a very low rate of penetration of social networks (only 6% of the population), Internet users (24% of the population) and GNI per capita (USD 780). There is also a severe shortage of secure internet servers (22 per million people) and low internet speeds. Nonetheless, Uganda ranks in the middle in terms of financial account penetration - 59.2% of the population has it. The country also demonstrates economic freedom and is included in the first half of the countries in the ranking in terms of the number of days required to start a business (24) and the cost of this procedure (40.5% of GNI).

4. Angola​

Angola has the lowest percentage of the population using the Internet for shopping (1%), the worst logistics performance, the lowest number of secure Internet servers (15 per million people), and the least digital skills in the population. The country also has few social media and internet users, as well as low internet speeds. Angola is rated well only in terms of the number of procedures (8), days (36) and the cost (11.1% of GNI) of starting a business.

5. Zambia​

Zambia has the highest corporate tax rate at a whopping 35%, as well as the lowest number of internet users (24%). The country also ranked second in terms of the number of collaboration spaces, and has slow internet speeds and penetration. But there are still some advantages of starting an online business in Zambia - these are fast start-up times (only 9 days and 7 procedures) and low start-up costs (34% of GNI).

6. Pakistan​

This country has a low financial account penetration rate among the population (21.29%), low scores in the Internet penetration category and poor Internet use for shopping (3.8% of the population). Pakistan can only boast of a small number of procedures for starting a business (5) and low start-up costs (6.7% of GNI).

7. Cambodia​

Although Cambodia scores low in many categories, it outperforms the other 10 lowest-ranked countries in terms of the share of social media users (58% of the population). The country also has the lowest corporate tax rate of the 10 worst countries for starting a business (20%), average number of Internet users (58% of the population), average time and procedures for starting a business, and average start-up costs (53.4% of GNI) ... However, there may be a shortage of clientele, since Cambodia has a small number of people with financial accounts (21.67% of the population) and very few people who make online purchases / payments (3.8% of the population).

8. Nepal​

It is worth noting that there are no countries in the same time zone as Nepal. Internet connectivity and penetration is also a problem. However, starting a business here is easy and economical - it takes 23 days, includes 8 treatments and costs 20.2% of the GNI.

9. Bangladesh​

Bangladesh has the second-lowest mobile speed (10.28 Mbps) and scores low in most internet-related categories. However, its main advantages are that starting a business here takes only 20 days and costs 8.7% of GNI.

10. Tajikistan​

The country has the fewest collaborative spaces of any country in the study, with only one coworking space located in Dushanbe. Tajikistan also has one of the lowest GNI per capita ($ 1,030), a small number of Internet users (only 26% of the population) and is one of the worst in terms of postal services development. The number of procedures and days required to start a business are 3 and 7, respectively. Business owners can also expect their start-up costs to be around 17.5% of GNI.

Winners in each category​

Aside from the best and worst places to start an online business, there are countries that beat others in every category. While there are many factors to consider when starting an online business, one of the following benefits can influence your decision in one way or another.

• Best mobile internet speed: United Arab Emirates (129.61 Mbps average)
• Best Fixed Broadband Speed: Singapore (229.42 Mbps average)
• Fixed broadband subscribers: France (over 45% of the population).
• The United Arab Emirates, Bahrain and Kuwait (99% of the population) are leading in terms of the number of Internet users.
• By the number of social media users: United Arab Emirates and Kuwait (99% of the population use social media).
• Secure Internet Servers: Denmark (over 277,000 servers per million people).
• Internet use to shop and pay bills: Norway (89% of Norwegians use the Internet to shop or pay bills).
• Lowest corporate tax rates: United Arab Emirates and Bahrain (0%).
• GNI per capita: Switzerland ($ 85,500)
• Financial account penetrations: Denmark (99.92%).
• Availability of payment providers: Australia, Austria, Belgium, Canada, Germany, Ireland, Italy, Netherlands, Spain, UK and USA (7 out of 7).
• Economic Freedom: Singapore.
• Number of procedures for starting a business: New Zealand and Georgia (1).
• Number of days to start a business: New Zealand and Georgia (1).
• Business start-up costs: Ireland, UK and Slovenia (0.1% of GNI).
• Countries with the same time zones: most of Europe and Central Africa.
• Logistics efficiency: Germany.
• Postal Service Efficiency: Switzerland.
• Coworking Space Availability: USA.
• Digital Skills: Finland.

The article analyzed the key criteria that you need to pay attention to when choosing a country to start an online business in 2021, and also presented a ranking of the best countries to start your own business.

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